The behavior of the perfectly competitive firm
A. theoretically leads to an inefficient allocation of resources.
B. maximizes the benefits to consumers, given the resources available to the economy.
C. reduces output in order to raise prices in the short term.
D. results in excess capacity and inefficiency.
Answer: B
Economics
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a. aggregate stock. b. aggregate demand. c. firms and not-for-profit organizations. d. land and capital.
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Because of diminishing returns, a factor in abundant supply has a
a. high marginal product and a high rental price. b. high marginal product and a low rental price. c. low marginal product and a high rental price. d. low marginal product and a low rental price.
Economics